Rising Raw Material Cost Driving Benzaldehyde Market in Asia

In the aftermath of China's easing lockdown situation, global oil prices have continued to rise, fuelled by positive demand from the local market. A derivative of Crude oil, Toluene costs have increased, which further drives up the prices of Benzaldehyde. Further, demand for the product improved after Shanghai and Beijing have reopened from their protracted lockdown, coupled with blistering heat in China.

The OPEC+ decision to increase crude oil production by July did not significantly relax the market trend of Crude oil for Asian importers. Since China's market has recovered, demand for crude oil has remained strong, and all petrochemical plants that have been closed since March are on the verge of reopening. As a result of the increased demand, Saudi Aramco hiked the price of Crude oil for Asian consumers by USD 2.10 per barrel in June.

 On the other side, in the Chinese market, both Benzaldehyde and raw material Toluene and Chlorine have elevated in the wake of spiralling crude oil value and enhanced demand from the downstream Food and Flavouring as well as cosmetic industries. Additionally, the rising temperature in the Asia- Pacific region inspiring the demand for Benzaldehyde, mainly in the additives, flavouring, and perfume industries. Therefore, the Benzaldehyde prices were rose by approximately 2.2% in the Chinese market during the preceding week.

As per the latest insight in China, Beijing will further reduce its Covid-19 curbs, anticipating the decreasing Covid cases in the region, which is expected to boost the market sentiment in the forthcoming weeks. Subsequently, traffic restrictions were eased on 6 June, smoothening the supply of the product to its global market.

Likewise, in India, Benzaldehyde prices witnessed an upward momentum backed by the rising cost of the raw material. Since the arrival of the summer season, the Indian market has been experiencing seasonal offtakes from the domestic market, and demand from the downstream Food and Flavouring as well as from the cosmetics industries has remained robust. As a result, the prices of Benzaldehyde were inclined by 2% in the first week of June.

According to ChemAnalyst estimation, "Benzaldehyde market is expected to increase, backed by the reopening of the Chinese Cities and the Summer in the Asian countries. Meanwhile, Crude oil prices are further anticipated to surge, which might impact the cost of the raw material. As a result, the prices of Benzaldehyde soar in the forthcoming weeks."